Update #2/ Week of February 22, 2010

Good Morning Everyone and Happy Tuesday! Yesterday we had a very rare negative close in equity markets for a Monday. Yesterday’s small lost of 19 points on the Dow ended a 4-day rally that happened all week last week. Today’s drop in equities appears to be a continuation of that direction as all three indices and commodities are in negative territory. Fortunately for us (I love saying that) credit markets are moving in the right direction and pricing is improved today about (.375) from yesterday’s morning rate sheet. Nice!

The cool mood on Wall Street is in reaction to the consumer confidence report from the Conference Board released this morning at about 7:00 a.m. our time. Up to that point the markets had been moving sideways, but when traders saw that February’s confidence index came in at 46.0 – all markets dropped, including commodities. This is the lowest reading in 10 months, and consumers surveyed blamed the jobs market as the biggest reason for their pessimism. No real news there.

The S&P/Case-Schiller Home Price Index for December came in pretty much as expected. Their reading of 145.9 is just slightly below the 146.3 anticipated. However, the 20-city composite report showed continued year-over-year decline of 3.1%, a bit better than the 5.3% decline posted the month previous. Southern California continues to post modest gains – no real trend one way or the other, so they said in their report this morning. A bottom to this housing market, especially in our State, would be nice. Yet, we have 40-50 BILLION DOLLARS of adjustable notes due to mature here in the next couple years and foreclosures still on the rise . . . and unemployment at near 10% levels . . . no real comfort in housing numbers quite yet.

It sure seems as though activity is picking up though. Maybe brokers are finally getting used to the new GFE . . . and with rates heading south, we all hope to get production numbers back up again. Call me or email me here early and have a terrific Tuesday!